Gasparas Defies City, Opens Plaza Pot Shop – September 22, 2011

Thursday, September 22, 2011

Kevin L. Hoover

Eye Editor

I STREET – The Sai Center saga saw an eventful week as proprietor Steven Gasparas was evicted from his longtime lair, moved his cannabis business to a storefront on a Plaza block without a permit, was served a written warning by the City and just kept on buying and selling pot.

But even as the local enforcement drama deepened, the federal Department of Justice may have monkeywrenched Arcata’s entire cannabis regulation scheme.

The Planning Commission has been reviewing the Sai Center’s application for a Conditional Use Permit (CUP), required under the City’s Land Use Code. It was to continue hearings on Gasparas’s application Sept. 27, but that has been postponed due to possible legal complications.

As he fought the Sai Center’s eviction from its 11th and K streets location, Gasparas urgently pleaded for approval of his CUP, but the Planco has continued to take oral and written testimony – mostly negative – on whether or not to allow a cannabis center on a Plaza block.

The night before his Tuesday, Sept. 13 eviction, and though lacking a permit or any immediate prospect of getting one, Gasparas moved to 889 Ninth St. and re-opened the next day.

“That is absolutely a violation and we intend to work with police and the city attorney to make sure he doesn’t operate without a permit,” said Community Development Director Larry Oetker. “It doesn’t matter whether it’s medical marijuana, a U-Haul [rental outlet] or what.”

Friday afternoon, three days after it opened and following discussions among City staff as to how best to proceed, Arcata Police officers served a Notice of Violation on the new Sai Center. Gasparas wasn’t present, but the notice was accepted by an employee and the store remained open.

A history of conflict

Gasparas’ business record in Arcata has been marked by clashes with authority, squabbles with individuals and multiple court appearances.

The Sai Center’s flouting of City law by remaining open is reminiscent of Gasparas’ refusal to close his Sai Om Shree Indian restaurant despite multiple Health Code violations and visits by the county Health Dept., Sheriff’s Office and Arcata Police.

Gasparas maintained that the eatery was not a restaurant, but an amenity to biofeedback customers at what he then called the iCenter, located a few doors away at 11th and K Street. He insisted on a jury trial for the violations, got one, was convicted of three misdemeanors and fined, with three years probation.

Other court skirmishes have involved former employees and the iCenter’s landlord.

Helmut’s living hell

Helmut Remiorz came to the U.S. in 1974 from Frankfurt, Germany following a stint in the Peace Corps. Trained as a chemical engineer and journeyman mechanic, he first went to Berkeley, then accepted a job offer in Arcata. In 1975 he founded German Motors and later sold it in 2004.

He now has time – between clashes with his troublesome tenant – to pursue his passion, restoring old Porsches and Alfa-Romeos. Now 62, the gentle German’s interests include reading classic literature, skiing, bicycling and photography.

But most of his hobbies have been neglected as he fought repeated battles with the intransigent tenant he took on in 2007.

“It’s been four years from hell, I tell you,” Remiorz said, offering a  regretful recap of the period.

The then-iCenter opened in July, 2007, he said, and within hours, Remiorz and Gasparas were at odds. “I made a mistake and I learned it the first week,” Remiorz said.

He said Gasparas had represented the iCenter as a biofeedback business which would “sell a little [cannabis] on the side.”

Gasparas immediately set up a grow inside his rental spot, fumes of which pervaded the building. “In the first day it started – the marijuana smell,” Remiorz recalled. “My tenants were in an uproar.”

Gasparas countered the complaints with some of his own, faulting employees of neighboring businesses for smoking too near doorways. Remiorz said Gasparas retaliated by smoking and cleaning cannabis outside of the neighboring NuGames computer gaming center, frequented by young customers.

Gasparas installed an ineffectual air filtration system, built rooms inside his space, violating his lease, and mildew began to spread from the grow.

Efforts to amicably resolve matters failed. “He wanted to go to court and have a jury trial,” Remiorz said, which could have cost him as much as $20,000. In Nov., 2007, a settlement was worked out between their respective attorneys giving Gasparas three years’ tenancy.

But as that term ran short, Gasparas added a note in the memo line of a rent check to the effect that acceptance of the check constituted a lease extension. But with the previous agreement in hand, Remiorz went ahead and deposited the annotated check.

Come November, 2010, Remiorz said Gasparas refused to budge, claiming that he had been granted a lease extension by the rent check cashing. The two went to court again, hammering out a settlement under which Gasparas would pay more rent and vacate the premises by Aug. 31, 2011, at which point, he assured Remiorz, he would have his CUP.

But he didn’t, and didn’t budge. Remiorz served Gasparas with an eviction notice on Wednesday, Aug. 31. The next day, Gasparas filed for a stay, and he notified Remiorz’s lawyer Friday, Sept. 2 at 2:30 p.m. – the last business day before the three-day Labor Day weekend – of a court hearing set for early the following Tuesday morning. Remiorz saw the timing as a tactic to place him at a disadvantage. “It’s not proper to serve at 2:30 p.m. before a holiday for an 8:30 a.m. court date,” recalled a weary Remiorz. “There was no time to prepare.”

In court, Remiorz said, Judge Tim Cissna gave Gasparas 10 minutes to make his case. “He rattled on, and the more he talked, the more he dug himself into the mud,” Remiorz said. “He told the judge that the contract he [the judge] had signed was invalid.” That didn’t go over well.

Remiorz countered by referring to the previous settlement and relating Gasparas’ multiple lawsuit threats. He said Gasparas had threatened to take him to court over alleged Americans With Disabilities Act and other code violations, a faulty water heater, even an employee’s bladder infection.

Cissna declined the stay, setting Tuesday, Sept. 13 at 9 a.m. as the time when a Sheriff’s deputy would serve a Writ of Possession and a locksmith would change the locks.

Gasparas then offered Remiorz $1,500 more in rent per month and to fix the bullet hole in the Sai Center’s front window if he could remain at the location until Sept. 31.

Remiorz declined. “If I give him another 30 days and he doesn’t get the permit, he’s going to do the same thing,” he said.

On calling a locksmith, he found Gasparas’s infamy unexpectedly helpful in easing the arrangements. “Oh, that guy?” said the locksmith. “Yeah, I’ll be there.”

Monday night move

Last Monday night, Sept. 12, just hours before the eviction, two SUVs – one with a trailer – turned up at the K Street Sai Center. There, with the aid of his parents and some younger helpers, Gasparas and his moving crew shuttled the shop’s furniture and equipment a few blocks east to the new location at Ninth and I streets.

A man who appeared to be standing guard out back as the trucks were unloaded said the “iCenter” – not the Sai Center – was moving in. Asked if it didn’t need a permit to open there, he said, “They got one.”

Happy Helmut

Tuesday morning, Remiorz gleefully swept trash from the gutter outside the vacated K Street Sai Center and accepted congratulations from passersby.

His happiness was tempered when the locksmith opened the place up and took stock of the renovations he’ll have to make. Inside, loose wires dangled from the ceiling, which had been punched through with ventilation holes. The filthy carpet and rickety internal walls will have to be removed.

The fires of irony

The move and lack of a use permit only briefly interrupted business as usual for Gasparas, who was open at the new location the next day. A request for an interview was met with abrupt refusal. “Get off my property,” he told a reporter. “I’m going to add you to the lawsuit.”

The property isn’t Gasparas’s. According to property records, 889 Ninth St. is owned by Kenneth Cook and Dennis and Patricia McDonald (she’s Cook’s sister).

In Sept., 2007, a massive grow house fire at an Alice Avenue rental home caused about $60,000 in damage. It might have been much worse – even tragic for firefighters – had the flames reached cases of loaded butane tanks stacked up in the living room. The flammable gas is used to extract concentrated THC – “hash oil” – from cannabis.

Dennis McDonald, a former Arcata Fire Protection District boardmember, then told the Eye that several other grow houses remained on the block and urged that they be investigated.

Within weeks, he and his partners had rented the ground floor of their building to the Let It Grow hydroponics shop which, among other things, sold supplies used in setting up and maintaining residential cannabis grows. That business later departed, and the space remained unoccupied until last week. Gasparas began renting it two years ago – at the  rate of $4,200 per month – in anticipation of moving the Sai Center there.

During the 2008 Land Use Code hearings, restrictions on cannabis center purchases from grow houses was strenuously opposed by Gasparas, who still openly advertises his willingness to buy and sell the drug from walk-in customers. The City is requiring the Sai Center to provide evidence that these vendors are qualified caregivers allowed to grow under the LUC.

With even meticulously planned grow houses continuing to burst into flames around town, and with two sons now serving as frontline firefighters for Arcata Fire, McDonald was asked about the seeming irony of facilitating a business which could be associated with residential grows.

He pleaded ignorance, saying that he had been out of town. “I want to dig into this a little bit,” he said.

McDonald was puzzled as to why the City would oppose the Sai Center’s new location. “The City wanted him to move closer to the Plaza,” McDonald said. “That’s what we heard.”

From who? “From him,” McDonald replied, referring to Gasparas.

Commission complications

The Sai Center’s fortunes with the Planning Commission have been marked by questions and criticism.

Several Plaza-area businesses have offered written comments urging non-approval on grounds that it is too close to the Plaza, a public park, and other cannabis centers, per LUC proximity stipulations.

Gasparas has countered by inferring preferential treatment for Humboldt Medical Supply (HMS), which gained its CUP after turning in the required operations manual and a satisfactory application within months of the new cannabis regs taking effect.

“You can actually view the whole entire business from sitting in the Plaza,” Gasparas said of HMS at the Aug. 23 Planco meeting. That’s incorrect. Only the portion of the building which houses a martial arts business and a chunk of Rita’s Mexican restaurant is observable from the Plaza. Gasparas also said he had been in business on K Street for five years without complaints from residential neighbors.

Harshing Mello 

Gasparas told the Planco that he was working to have his Redding cannabis cultivation warehouse supply “99 percent” of the Arcata shop’s medicine, but that he needed to retain a couple of “local vendors” to ensure a steady source.

Gasparas said the Redding grow was slow in getting up to capacity, but that he had verbal assurance from Redding Police Chief Peter T. Hansen that it is legal.

Joe Mello, who had a short-lived arrangement to grow for Gasparas at the Redding warehouse, condemned his business practices. He claimed to have lost money on the business dealing with him a year-and-a-half ago.

Mello said Gasparas told him that for a $9,000 investment, Mello could be a gardener in his Redding grow warehouse. “I thought I was renting a spot and would sell him all my product,” Mello said. He said Gasparas promised him $75,000 annual income once production ramped up.

But right away, the arrangement went off the rails. Mello said Gasparas refused to give him either a contract for his services or a key to the warehouse and treated him like some sort of captive laborer. He said he had to wait for someone named “Brandon” to show up to let him in and even to depart the premises. “I had to ask permission to leave,” he said.

Breaking that rule, he said, was his undoing. He said that one day he was unable to reach Gasparas at quitting time. Rather than wait to be let out, he left, locking the warehouse door and gate behind him.

The next day, he said Gasparas walked in and told him, “Get the fuck out of here,” and refused to refund the $9,000 for the abortive venture. Mello said he sued Gasparas, but lacking paperwork, he was awarded just $4,500.

Gasparas told the Planco that Mello was lying, had been “disruptive within the collective,” and that the judge had praised him for his employee policies while awarding Mello the judgment. Mello called Gasparas a liar.

Gasparas attributed employee problems on failure by some to meet his stringent business standards. “You’re not at some store packing boxes,” he said. “You’re dealing with a medical product.”

Fair’s fair

Gasparas offered a mixed message to the Planco. While repeatedly suggesting that HMS had been given advantages in the approval process, he nonetheless lauded the City’s requirements as fair and appropriate.

“We were given extra hurdles,” he said, noting later that, “One hundred percent of the things I’ve had to do are reasonable,” he said. “I consider them all fair.”

He did fault the City for allowing him to change the address on his business license at City Hall’s Finance Dept. window, which he said caused him to place a nearly $10,000 deposit and sign a lease for the new location. He said that the day after getting the lease, the City called to notify him that more requirements would have to be met before he could operate there.

Commissioner Julie Vaissade-Elcock denied favoritism and cautioned Gasparas not to compare his business to HMS.

She said HMS had been the only one to get its application in on time and that its sole LUC issue was proximity to the Plaza, making it relatively easy to waive.

“We’re not playing favorites,” she said.

Oetker is fed up with the accusations as well. Delays in processing CUP apps, he said, had to do with late and incomplete applications. He said his office has been working steadily with the cannabis centers to get complete applications before the Planco.

“At some point in time, somebody has to make a decision,” he said.

Art project

Flyers affixed to the Sai Center’s old location directing customers to the new place were taken down. Thursday night, a man and woman were out front of the K Street building decorating the trailer which had been used in the move with Sharpie marking pens.

The trailer was slathered with slogans, interspersed with cannabis leaves, reading “Grand Opening” “SAI CENTER HAS MOVED,” “Prop 215 Collective” and the center’s new address and phone number. Most of the stringy, spectral lettering was difficult to read from passing cars, if that was the intention.

But maybe not – the woman called it an “art project” and showed a thumbnail sketch of the mural in progress which depicted a logo including a stylized eye. It bore little resemblance to the wispily-lettered full-scale version. One statement was emboldened for readability in a Christmas-like red and green color scheme, though it lacked case consistency. “We Buy and SEll MEDICINE,” it read.

The man involved later visited the Eye office to ask that his face not be shown in any published photo. He said he had been spit on and had garbage thrown at him by passersby during the streetside artistic foray.

Lawyers loom

Though cannabis activists have condemned Arcata’s cannabis regs as invalid, intrusive and possibly unconstitutional, it was pressure from the other side – the federal government, which considers any licensing of cannabis illegal –  that has now thrown Arcata’s system into question.

Two weeks ago, the City of Eureka received a letter from U.S. Northern District Attorney Melinda Haag warning that the city’s pending medical cannabis ordinance would violate federal law. If Eureka violates the Controlled Substances Act by licensing cannabis cultivation, processing and distribution, Haag warned that the city and its officials could face injunctions, civil fines, criminal prosecution and property seizure.

The letter was not sent to Arcata, which already has Land Use Code provisions regulating medical cannabis centers. But the prospect of being held personally liable – possibly even jailed – for enforcing municipal cannabis laws has motivated City staff to suspend the approval process pending direction from the council. The matter has been placed on the council’s Oct. 5 agenda.

“If local jurisdictions issue permits for marijuana operations, planning staff may be prosecuted,” said Larry Oetker, director of Community Development. “From my perspective as a professional planner, my role is to process permits according to the Arcata Municipal Code. Now myself and staff are being intimidated in implementing it.”

He said the core issue is a classic one – jurisdictional clash between local, state and federal government.

Even as it prepares to deal with a possible legal menace from the feds, the City is girding for a possible court tangle with Gasparas.

A special Monday morning City Council meeting to consider purchase of a new playset for Chevret-Vaissade Park was preceded by a closed session over anticipated litigation, possibly the beginning of another legal adventure for Gasparas, this time involving the City.

Afterward, Mayor Susan Ornelas reported that the City would take “appropriate legal action” against the Sai Center for operating without a required permit.

“We’re hoping for voluntary compliance, but I’m not very optimistic that that’s what will happen” said Police Chief Tom Chapman. He said the City had several options, including nuisance abatement, court injunction, even possible criminal prosecution. He noted that the Land Use Code specifies that property owners are subject to civil sanctions as well.

When Eureka’s Hummingbird Healing Center opened without a CUP in 2009, the county obtained a preliminary injunction with Judge Dale Reinholtsen labeling it a “public nuisance.” Its CUP was later approved in February of this year.

The City could go the same route, but given his record of non-compliance, what level of legal intervention would stop Gasparas from continuing to do daily business at 889 Ninth Street is unknown.

The City’s Notice of Violation was also served to the McDonald/Cook Building’s owners Friday, but their Sai Center tenant remained open for business through the North Country Fair Saturday and Sunday. Signs in the center’s window read “Prop. 215 Community Welcome.”


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